Friday 4 July 2008 19.01 EDT
First published on Friday 4 July 2008 19.01 EDT

The British grand prix will be held at Donington Park from 2010 after the circuit's owners promised a £100m investment over five years, ambushing their rivals at Silverstone, which has hosted the showpiece race since 1987.

The grandees of the British Racing Drivers' Club, which runs Silverstone, said they were "considering our position following in-depth and ongoing contract negotiations" after the announcement yesterday that next year's race would be their last. They believed the renewal of their own contract was only days away and little more than a formality but, with plans for a new £30m pit and paddock complex recently confirmed, their major problem has been paying Bernie Ecclestone, formula one's commercial rights holder, his £11m annual fee to host the race.

Given their redevelopment plans, it is a sum that would have stretched the BRDC and has left Damon Hill, its president, feeling bitterly frustrated. "There's always been the question of the FOM [Formula One Management] fee and ultimately that is the deciding factor," said Hill. "To quote Bernie, he once said: 'You can have anything you like, as long as you pay too much for it,' but we can't pay too much for something."

Hill believes that, if Ecclestone and CVC Capital Partners, who run formula one's commercial arm, had re-invested a fraction of what they make from race organisers, Silverstone would have delivered the facilities demanded. "We're in it because we want to be there but we can't go beyond the balance, the tipping point, and Bernie knows that," Hill said. "So it's a huge disappointment, a real blow to our efforts and desire to see the grand prix retained."

The apparently final breach between Ecclestone and the Silverstone race organisers has been brewing for many years. In the early 1990s Ecclestone offered a financial helping hand to the BRDC only to be rebuffed. From that day on the self-made billionaire always regarded the club members as a group of well-meaning amateurs rather than professionals who should be interested in the running of a world championship event.

More recently the friction increased during Sir Jackie Stewart's 10 years as BRDC president and the two men traded insults on such a regular basis before each British grand prix that the assumption was that the Donington Park issue was another example of this personal points scoring. This does not now appear to be the case.

Ecclestone, though, blamed the government for not giving financial backing to Silverstone. "I am sorry that we could not have helped Silverstone to raise the money to carry out the circuit improvements and run formula one," he said. "The government should have supported them, which would have cost probably less than 0.002% of the government's commitment for the Olympic Games."

Expressing his frustration with the BRDC, Ecclestone said: "They've had a contract on their desk for a few months and we've been waiting for a signature but they haven't signed. They've been under pressure now [to re-develop] for five years and it's not achieved anything. The important thing is we still have a British grand prix, whereas we would have lost it 100%."

Ecclestone added that the BRDC had requested a two-week extension during which it is thought it planned to ask the government for a subsidy. "I always said the British grand prix was the deadline and they weren't ready," he said.

The FIA's president, Max Mosley, hinted that the pair had run out of patience with the BRDC after several years of protracted talks and suggested that Silverstone had still not reached the standards demanded of them. "After many years of patient but fruitless negotiation with the British Racing Drivers' Club we are delighted that Bernie had nevertheless been able to ensure that the British grand prix will keep its place on the formula one world championship calendar," he said.

The veteran BRDC member Tim Parnell, whose late father Reg drove a factory Alfa Romeo 158 in the inaugural world championship British grand prix at Silverstone in 1950, said he was aghast at the prospect of Donington Park taking the race. "I am shocked and disappointed," he said. "They will have to do a great deal of work, particularly on traffic access. The congestion at the recent MotoGP motorcycle meeting had to be seen to believed."

There is considerable work ahead for Donington Park to transform itself into a world-class grand prix circuit in two years, even with the promised £100m investment from a mystery doner. But its owners, Simon Gillett and Lee Gill, are confident it will be ready. "We will start work at the end of the season and I've no doubts the British grand prix will take place there in 2010," said Gillett, who added that his company had a 10-year deal for the race.